Mayor Recommits toAmbitious Recycling Pact

The Bloomberg administration plans to announce today that it will sign a 20-year contract with one of the nation's largest recycling companies, a move that assures the city's broad recommitment to recycling.

The most ambitious component of the plan is the construction of a $45 million plant on the Brooklyn waterfront to recycle all the city's residential metal, glass and plastic, officials who have been briefed on the contract said yesterday.

The announcement comes just two years after the city largely abandoned recycling as an economic drain in a time of budget cutbacks. While the Bloomberg administration has gradually reinstituted residential recycling programs, the contract reflects the administration's bottom-line conclusion: as landfill prices increase and technology improves, recycling is the most cost-effective way to get rid of much of its garbage.

The commitment to recycling solidifies what has been an on-again, off-again program that left New Yorkers guessing from year to year what to do with their garbage. The debate has often been positioned between environmental concerns and rudimentary questions about whether recycling could ever be economically feasible to governments facing tight budgets. With this contract, the Bloomberg administration has settled the debate.

Elected officials and industry experts say the city's vote of confidence in the virtues of recycling is expected to have profound repercussions nationwide as local governments decide whether to pursue aggressive recycling programs.

"Much like market analysts watch the Federal Reserve in order to assess monetary issues, many people look to New York City when it comes to municipal policies," said James Thompson Jr., president of Chartwell Information, a market research firm in San Diego that analyzes the waste management industry. "I think the repercussions of this will be pretty widespread."

Under the contract, one of the largest scrap metal companies in the country, the Hugo Neu Corporation, based in Manhattan, will invest about $25 million in the plant, said officials who have been briefed on the contract. Hugo Neu recycled most of the steel from the World Trade Center.

Another industry official explained that the city would spend about $20 million to repair a pier so that it could accommodate barges that will carry roughly 90 percent of the material to the plant.

The plant, scheduled to be finished by 2007, will be on city-owned land at the South Brooklyn Marine Terminal in Sunset Park.

When the contract expires, the city will maintain most of the rights over the operation, the officials who have been briefed on the contract said.

The mayor's office and officials with Hugo Neu refused to comment on the contract. Details are expected to be outlined today at a news conference by the mayor.

"The mayor deserves credit for forging a deal that marries sound environmental policy with good business," said Mark A. Izeman, a senior lawyer at the Natural Resources Defense Council. "The environmental community has been advocating this for years, and its great news that recycling is here to stay."

A number of factors explain the city's shift away from a policy that shunned recycling just two years ago, when the mayor argued that New York could save $40 million annually by dumping the materials into landfill rather than recycling them. Recent studies, including one by the city comptroller's office, indicate that initial numbers were significantly off the mark.

Furthermore, landfill prices have also shot up in the last several years. But most of all, Mayor Michael R. Bloomberg has come to the view that the savings of recycling lie in long-term contracts with recycling companies rather than short-term contracts with less efficient waste-removal companies, as is the current practice.

Carmen J. Cognetta, counsel to the City Council's Sanitation and Solid Waste Management Committee, said the city currently pays around $50 per ton to recycle metal, glass and plastic, but that cost will drop to around $40 per ton once the sorting operation is built.

It will likely drop even further, perhaps to around $20 per ton, as Hugo Neu picks up a larger share of the more lucrative paper market, which is part of the terms of the contract, he said.

The cost of paying haulers to bury the material in landfills is now around $70 per ton, as the cost of sending it to out-of-state landfills has risen 46 percent in the last three years, according to city statistics.

By offering a long-term commitment, the mayor has enticed Hugo Neu to build the type of highly mechanized operation needed to sort materials cheaply and efficiently.

In the past, the city has offered five-year contracts, often with 10-day cancellation clauses. Under these contracts, companies have been reluctant to invest in more than the most basic facilities that consist mostly of low-wage workers who sort the materials from conveyor belts.

In larger and more advanced plants like the one Hugo Neu will build in Brooklyn, manual labor is supplemented by modernized equipment that uses heavy magnets to pull off metals, blowers to sift paper and plastic and optical devices to separate different colors of glass.

The long-term contract also allows the company to reach better deals with buyers of the materials, further driving down the cost to the city.

And by placing the sorting operation within the city, the contract will lower the high transportation costs the city now pays to cart the materials farther away.

Once the plant is operating, the city's sanitation trucks will still pick up the recyclables, then take it either directly to the Brooklyn complex or to one of two transfer stations owned by Hugo Neu.

The city is also considering whether to send the materials through the city's marine transfer stations once they are reopened.

A local lawmaker involved in sanitation issues praised the city's approach.

"With this contract, the city does for metal, glass and plastic what it did for paper nearly 10 years ago," said Councilman Michael E. McMahon, a Staten Island Democrat and chairman of the Council's waste management committee.

In 1997, the city offered a 20-year contract for 50 percent of the city's paper recycling, and Visy Industries, an Australian recycling company, stepped forward to build a $250 million processing plant on Staten Island.

"That contract gave paper recycling a permanent home, it attracted the needed investment to build permanent infrastructure and now the city gets amazing returns on it," Mr. McMahon said. "This contract holds the same basic promise."

The recycling contract is also a precursor to the mayor's eagerly awaited 20-year waste management plan, which is to be announced by early October. That plan will detail the city's plan to deal with its trash now that its huge Fresh Kills landfill on Staten Island has been closed.

Since taking office, the mayor has struggled to get a solid grasp on the city's trash problems. In August 2002, he announced an ambitious schedule for reopening the city's marine transfer stations, only to backtrack once he realized that his goal was much more expensive and complicated than planned.

In a report card in July, the mayor gave himself an F in waste management for failing to create a plan for the city's trash problems.

With this contract, however, the city will lock firm plans into place for the removal of about 20 percent of the city's total waste flow.

"The mayor might have given himself an F on the trash issue not long ago," Mr. Izeman said, "But in striking this deal, he just turned in an A paper."

A version of this article appears in print on , Section A, Page 1 of the National edition with the headline: Mayor Recommits to Recycling With an Ambitious 20-Year Pact. Order Reprints | Today’s Paper | Subscribe